Business formation has been on the rise in the state of Tennessee, registering an increase of 22% in the last quarter of 2021 compared to the same period in 2020. In Metro Nashville, job recovery appears to have been achieved in December 2021 with 353,000 workers added back to the economy since the spring of 2020.
Given these conditions, now is as good a time as any to take the next step in forming the business you’ve always wanted. If you’re ready for the big move, one of the first things to do is get in touch with a Nashville accounting firm and get professional and comprehensive guidance in starting your entrepreneurial journey.
As any seasoned accountant will tell you, there’s more than one way to achieve success. But some practices and steps are essential to any venture. Keep the following tips in mind to make sure you start off on the right foot.
1. Have accurate bookkeeping
Bookkeeping may be a tedious and routine job that you’d rather avoid, but it plays a major role in any business. Keeping an accurate record of your transactions will help you keep track of your financial health and guide you in making important decisions.
Understandably, you would much rather devote your time in growing your business than in maintaining records. This is one advantage of hiring an accounting firm. They can do the job for you and make sure your books are accurate and timely.
You can also consider getting accounting software that makes bookkeeping easy. Find a product that matches your specific business needs and work with your accountant in customizing and setting up the system so you can maximize its benefits.
2. Hold on to your receipts
As many transactions today are done online, you might think it’s not necessary to keep receipts. However, receipts and sales slips contain information that can prove useful in the future. It’s not enough to simply stash away receipts in a safe place. You must organize them into categories so you can easily find what you need when the time comes.
Receipts can show you which products and services are selling, and which need a bit more work. They can also reveal your customers’ preferred payment method. More importantly, your receipts — both for your business and personal transactions — will serve as an important tool in filing your tax returns. They will help you and your accountant determine if you’re liable for certain taxes and for how much. Conversely, they can also help you see if there are tax deductions or exemptions you can benefit from.
3. Have a separate bank account for your business
In a sole proprietorship, you’re not required to open a new bank account for your business. However, it will greatly benefit you to do so. Having a separate bank account will make it easier to track the money that goes in and out of the business, and distinguish between your personal and business transactions when preparing your tax returns. It will also help make audits go faster.
If you need more tips and in-depth assistance in laying the accounting groundwork for your business, call an experienced CPA to guide you.
Sources:
Quarterly Growth for Business Formation in TN Up for 10th Straight Year, WKRN.com
The Importance of Keeping Receipts, WellyBox.com
Post-Pandemic Recovery: What to Focus On And How a CPA Can Help
